Western Digital (NYSE:WDC) updates on revenue, now expecting $4.75B over $4.7B prior, gross margin, now at 36% over 35%, operating and net interest expenses, with respective expectations of $805M and $205M to remain unchanged, tax rate, to 13% from 14%, and EPS, to $2.10-$2.15 from $1.85-$1.95. Full release of the company's Q2 report is scheduled for late January.

Separately notes a royalty-bearing agreement with Samsung Electronics (OTC:SSNLF) has been renewed for the cross-licensing of both companies' semiconductor patent portfolios, predominantly covering multi-level flash memory and flash storage systems. Renewed collaboration to remain effective through December 31, 2024.

Should the theorized scenario play out, shareholder returns, debt reduction, substantial M&A and a combination of all of the above are cited to be on the table. Further notes, "It would likely also remove an overhang on the stock that has been in place for many years."

Additionally identifies other potential beneficiaries on the hypothesis including NetApp (NASDAQ:NTAP), with 43% of its market capitalization offshore, Hewlett Packard Enterprise (NYSE:HPE), at 26%, HP (NYSE:HPQ), at 21%, Western Digital (NYSE:WDC), at 17%, and IBM (NYSE:IBM), at 6%. Does, however, also consider levels of international revenue exposure and the impact other forthcoming policies could have on these names, graphing out some related percentages in a model displayed here.

The company expects FQ1 revenue of $2.8B and GAAP and non-GAAP gross margin of about 28% - this versus previous guidance of at least $2.7B and 27%, and Street estimates for $2.74B.

Expense measures continue to progress and operating expenses are expected to be $580M vs. $470M the previous quarter - mostly thanks to higher performance-based compensation. The company ended the quarter with about $1.5B of cash and cash equivalents on hand.

Goldman Sachs downgrades Western Digital (WDC-0.3%) from Neutral to Sell. Price target lowered to $38 from $47 (current price $44.91), implying around 15% downside from the current level.

From Goldman Sachs analyst Mark Delaney: "To the extent the stock trades higher on short-term events, we would use it as an opportunity to sell the stock given risks that we believe could pressure WD's business in the next few years. We expect HDD [hard disk drives] sales to decline secularly."

Western Digital reported a $351M net loss and cited acquisition expense pressures in its Q4 report last Friday.